Nvidia Invests $5 Billion in Intel for AI Chip Collaboration, Stock Soars 24%

Nvidia has announced a $5 billion investment in Intel alongside a strategic partnership to co-develop custom AI chips for data centers and personal computers. The deal involves Nvidia purchasing approximately 215 million Intel shares at $23.28 each, representing nearly 4% of Intel's equity.

According to the agreement, Intel will develop custom x86 CPUs optimized for Nvidia's AI platforms, aiming to solve longstanding CPU-GPU communication bottlenecks. For personal computers, Intel will create system-on-chip designs incorporating Nvidia's RTX graphics technology. Nvidia CEO Jensen Huang described the collaboration as "a fusion of two world-class platforms" that will "lay the foundation for the next era of computing."

The partnership comes at a critical time for Intel, which lost nearly $19 billion in 2024 and another $3.7 billion in the first half of 2025. The company plans to cut 25% of its workforce by year's end. This investment follows earlier support including $8.9 billion from the Trump administration for a 10% stake and $2 billion from SoftBank.

Market analysts view the deal positively, with Wedbush Securities' Dan Ives stating it "brings Intel into the AI game." The collaboration also puts pressure on AMD, which now faces a combined Intel-Nvidia force in both AI and PC markets. The deal requires regulatory approval, with no specific timeline disclosed for when jointly developed products will reach the market.